1. Technical Field
The present invention is directed generally toward rating systems for online auctions. In particular, the present invention is directed toward a method, computer program product, and apparatus for providing a user rating service for online auctions that uses objective rating criteria to promote fairness and that allows ratings to be shared among online auction services.
2. Description of Related Art
In any society in which division of labor is present, there exists the fundamental problem of valuation. When a person exchanges goods or services for other goods, services, money, or other resources, it is always necessary to make an inquiry into the value of the goods, services, or money exchanged.
According to basic principles of economics, trading resources according to their proper valuation should bring about the most efficient use of available resources. In practice, however, valuation of resources is anything but easy. Each party in an economic transaction can be assumed to be acting in his or her own best interest, and that best interest is almost certainly opposed to that of the other, assuming a two-party transaction. Thus, a seller will want to receive a high price for a good, and a buyer will want to pay a low price (no price at all is even better).
To complicate matters, many resources are difficult to value simply because the parties to a transaction have access to only limited information about the resource. A prime example of this is corporate stock. The ownership rights to a portion of a corporation are difficult to value, simply because much of the information pertaining to a corporation and its earning potential is not public, and much of what is public cannot be predicted.
To solve this fundamental problem of valuation, people have, over time, devised different market mechanisms or negotiating schemes for determining resource values. Auctions, where buyers submit bids and certain buyers “win” (buy the product) and other buyers “lose” (are prevented from buying the product) are a common market mechanism.
Online selling through the Internet has made it simpler to search for and purchase products (particularly hard to find items), because of automated searching. Online auctioning, in particular, is a convenient means for buying and selling products, because, unlike conventional auctioning, online auctioning is not limited by any physical space—anyone can buy or sell from anywhere in the world.
This enormous flexibility is not without some drawbacks, however. Many merchants and consumers are less than reputable—that much is axiomatic. For this reason, merchants and consumers in a physical environment attempt to shield themselves from disreputable commercial conduct in a number of ways. These range from the objective (e.g., relying on a credit report to screen customers) to the subjective (e.g., relying on one's intuitive sense of a person's honesty to screen customers or merchants). In an online environment, however, many of these safeguards disappear.
As an attempt to remedy this inability to screen potential business contacts, the online auction house eBay, Inc., of San Jose, Calif., has developed a rating system, whereby buyers and sellers rate other buyers and sellers with whom they do business. This rating system provides users of eBay's online auction facility with information they can use when deciding when to do business with another user. Thus, eBay allows its users to view others' subjective observations with regard to other users.
The eBay rating system, however, is purely subjective and must rely solely on user comments. This is problematic for two reasons. One is that new users, who have little or no ratings from other users, are at a disadvantage, because their ratings will be low until enough other users give them positive ratings. Another is that it is easy to abuse such a rating system by engaging in sham transactions with co-conspirators to give each other high ratings.
Another drawback to eBay's rating system is that the information that eBay collects is only usable at eBay's website. It cannot be used at other Internet auction sites.
What is needed, then, is a rating system that includes some objective criteria for determining ratings.